Thank you for your interest in The Institute of Production and Recording.

7 Things You Should Know About College Loans

Student loansSo you’re going to take the plunge and go to college, good for you. The next question typically is, how will you pay for it?

There are many options for getting college financing. Some, like grants and scholarships, don’t have to be paid back. But,if you can’t get grant or scholarship dollars, another choice is to check out college loans.

There are a several loan types available. Federal, state and private loans are the most common. Federal and state loans typically provide the best interest rates. They also offer a variety of repayment choices.

You must complete a FAFSA to be eligible. Once you have received your financial package, you can visit to keep track of your federal loan information. Private loans will vary from institution to institution.

As well as the types of loans, there are a number of other facts you should know about college loans.

1. Put Together a List of Questions – Loans come loaded with important details that you need to know. Before you start searching, make a list of questions that cover such topics as:

  • The type of interest rate—fixed or variable
  • Total loan cost
  • Available hardship waiver
  • Deferment policies
  • Grace period
  • Pre-payment options
  • Co-sign requirements

It might be worth your time to research general information about how private loans work. Check out these articles as a place to start: Types of Student Loans, Loan Repayment Basics and Understanding Your Student Loans.

2. Think About the Impact of Interest – When you are in the process of finding loans, remember the impact of interest on the amount of money you will be repaying. The longer period of time it takes you to pay back the loan, the more interest you will pay.

In addition to the questions above, you should determine if your loan has an interest rate cap. Federal loans are likely to have lower caps than private loans.

You may find that your lender provides flexible payment benefits, such as automatic debit programs, which can reduce your interest payments. If you pay more than the required minimum or you begin paying during your grace period, you’ll cut some interest out, as well.

The more time you spend researching what your repayment terms will be, the better prepared you’ll be when it’s time to start paying off those loans.student loan checklist

3. Find out If You Have a Grace Period – Many loans include a grace period that allows you to get on your feet financially once you are out of school. The period starts when you drop below full time, leave school or graduate.

The Department of Education Loan Services, Sallie Mae servicing, clarifies which federal loans have grace periods,

“If you have a Direct Subsidized or Unsubsidized federal loan, your grace period lasts for six months. You must begin repaying your loan(s) at the end of your six-month grace period. If you have a Direct PLUS federal loan, there is no grace period. Payments begin immediately after the final loan disbursement is made. Payment postponement options are available. Contact us for details.”

4. Finding a Cosigner – Having a cosigner increases the chance that you will be approved for a loan. A cosigner legally agrees to be jointly responsible for loan repayment should the first signer (you) fail to make arrangements.

People to ask may include:

  • A parent or guardian
  • A mentor or close friend
  • Another relative (grandparent, aunt, uncle…)
  • Your spouse or significant other

As long as they have a good credit history and understand the responsibilities involved, almost anyone can be a cosigner.

5. You Can Find Loans Online – If you want to look beyond your local bank or credit union, you can check online to find a host of lenders. Here are a few loan websites you might find useful:

These websites can show you the benefit of consolidating your federal loans for easy repayment.

When you find different loan sites, you should carefully examine the fine print to see if there are added fees to the quoted rates.

6. You Can Get Help! – Learning about all the information surrounding student loans can be a bit intimidating, but there are many people available who can help you through the experience.

  • If you need help filling out your FAFSA form, you can chat live in Spanish or English with counselors who can guide you.
  • There are companies that, for a fee, will provide assistance and even file your FAFSA for you.
  • Your school’s financial aid office can provide assistance in understanding which loans are best for your situation.

You may want to talk to other students who have gone through the process before you. They can offer experience and support.

7. Remember Scholarships – Scholarships can reduce the amount of money you need to borrow. They are a great way to help pay for tuition costs because you do not have to pay the money back.

Taking a carefully planned approach to student loans will reduce stress during the process and prepare you for the impact that loan repayment will have on your life after college. Once you have the financial details of your college experience in place, you can focus on enjoying one of the best investments you could ever make—a college degree.




Thank you for your interest in the Institute of Production and Recording.

A representative will be contacting you shortly.